Good day, and welcome to the B&G Foods third quarter 2021 earnings call. Today's call, which is being recorded, is scheduled to last about one hour, including remarks by B&G Foods management and the question and answer session. I would now like to turn the call over to Sarah Jarolem, Senior Director of Corporate Strategy and Business Development for B&G Foods. Sarah. Good afternoon, and thank you for joining us. With me today are Casey Keller, our Chief Executive Officer, and Bruce Wacha, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the investor relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that the parts of discussion today includes forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We refer you to B&G Foods most recent annual report on Form 10-K and subsequent SEC filings for a more detailed discussion of the risks that could impact our company's future operating results and financial conditions. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We will also be making references on today's call to the non-GAAP financial measures, adjusted EBITDA, adjusted EBITDA before COVID-19 expenses, adjusted net income, adjusted diluted earnings per share, and base business net sales. Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Casey will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and his thoughts concerning the outlook for the remainder of fiscal 2021. Bruce will then discuss our financial results for the third quarter as well as expectations for 2021. I would now like to turn the call over to Casey. Good afternoon. Thank you, Sarah, and thank you all for joining us today for our third quarter earnings call. The company's performance in the third quarter was strong. Base business net sales, which excludes Crisco, grew at +9.2% versus the same period two years ago, accelerating from +7% in Q2. With the addition of Crisco, our Q3 2021 net sales are ahead of last year's COVID-19 period. Bruce will talk categories and brands later, but we are generally seeing strength across the portfolio. Most of our key categories performed well when compared to 2019's pre-pandemic third-quarter results. Net sales of Green Giant and spices and seasonings were up double digits compared to 2019. Net sales of Ortega and Las Palmas, our two leading Mexican food brands, were up high single digits compared to 2019. Our baking brands also had a strong performance for the quarter compared to 2019, led by Crisco, Clabber Girl, Baker's Joy, et cetera. While demand was strong, resulting in elevated sales, we are also managing through many of the same challenges to supply chain and costs that have plagued the industry. Inflation in full year 2021 is in the mid-single digits, with the second half increasing to a double-digit increase across the portfolio. As discussed last call, inflation on Crisco is significantly higher than the base portfolio given the major increases in soybean and canola oil. We have responded with significant price increases, where appropriate, raising list prices and/or optimizing trade to directly offset higher input costs. While we did act early to identify and address inflationary pressures, the majority of our price increases are effective in the second half, with the largest increase on Crisco effective at the end of September. We project continued inflationary pressure into first half 2022 and will price to recover year-over-year cost increases. Additionally, we are driving aggressive cost optimization efforts to offset continued inflation. From a supply standpoint, we continue to deal with shortages in packaging materials, freight delays, and contract manufacturing capacity. However, overall customer service levels are improving in recent weeks, aided by lifting allocations on Green Giant SKUs with the new crop pack. Our goal is to manage our business to stable, steady margins. For the current portfolio, the goal is roughly an 18% adjusted EBITDA margin, with pricing and productivity actions recovering cost pressures on margins. Longer term, our goal is to improve to a 20% adjusted EBITDA margin with accretive M&A, efficiencies, and some base business organic growth. In the near term, inflation will make that more challenging, but we believe that is the right target for this business. During the third quarter, we successfully completed the integration of Crisco, and I want to congratulate our team for a smooth transition. Crisco is our second largest acquisition, and we are happy with the performance year to date under our ownership, despite some volatility in commodity prices. In August, we also announced that we reached an agreement to sell our Portland, Maine manufacturing facility. We expect the sale to close during Q1 2022. While shutting a factory is never an easy decision, it became clear the 100-year-old Portland facility had reached the end of its useful life and was no longer cost competitive. The site will become the future home of the Roux Institute at Northeastern University, which is a great outcome for the Portland community. We also continue to make investments in our existing facilities, including a new high-tech automated line in the Ankeny, Iowa spices and seasonings facility, as well as new lines in our Hurlock, Maryland and Yadkinville, North Carolina facilities to increase our capacity for Ortega taco sauces and taco shells, respectively. Finally, after four months in the business, I wanted to share the key priorities and choices that we, the B&G team, are laser-focused on. First, managing B&G Foods effectively through the current inflationary and pricing environment. Second, improving organic growth performance beyond COVID recovery. Third, focusing on brands and categories where we have the capabilities, scale, and right to win in terms of both resources and structure. Fourth, making disciplined acquisitions that are accretive to our portfolio and fit with our core expertise in center store dry distribution. Fifth, accelerating cost savings and productivity efforts to eliminate non-value-added costs and strengthen margins. More to come on those in future calls and discussions, including specific plans and updates. I will now turn the call over to Bruce for a more detailed discussion of the quarter. Bruce? Thank you, Casey. Good afternoon, everyone. As Casey mentioned, we had a strong financial performance during our third quarter, despite a very challenging operating environment. Net sales continue to be elevated and are tracking closely to the initial set of assumptions that we used to create our annual budget for fiscal 2021. Similar to our plan for the year, we are showing an acceleration in net sales growth as we go through the year when compared to last year and our pre-pandemic 2019 numbers. As we continue to work our way through the balance of the year, we are approaching a period that we expect to be more similar to last year, still not quite normal, with more Americans eating at home more frequently than they did pre-pandemic, but also no longer lapping the height of the pantry loading that coincided with the early days of the pandemic. The result is that after adjusting for the impact of Crisco and the impact of an extra week in last year's third quarter, we not only have a net sales increase compared to 2019, but we also have sales trends that are much more similar to those during last year's COVID-19 enhanced third quarter. Separately, but not entirely unrelated, industry-wide supply chain challenges and input cost inflation have served to cap some of the upside that we would otherwise be seeing as a result of this robust demand. For some of our brands, this means that sales could be higher, OOS and out of stocks for certain items. For many of our brands, we have the sales, but margins are challenged relative to what we typically expect from the portfolio. Input costs across our portfolio generally continue to be up mid-single digits for most products, with extreme cases for certain products like soybean and canola oils, transportation, and now cans, which are all up double digits. Like virtually everybody in the food manufacturing industry, we are aggressively increasing price where appropriate, plus cutting costs where possible to protect profitability and ensure the long-term viability of our margin structure. Now, for the third quarter 2021 highlights. We reported net sales of $515 million, adjusted EBITDA before COVID-19 expenses of $96.4 million, adjusted EBITDA of $96.2 million, and adjusted diluted earnings per share of $0.55. Adjusted EBITDA both before and after COVID-19 expenses as a percentage of net sales was 18.7%. Net sales of $515 million was up $19.2 million or 3.9% from Q3 2020, and up $108.7 million or 26.7% from pre-pandemic 2019. Crisco, which we acquired in December 2020, generated $71.2 million of net sales in Q3 2021, ahead of our forecast for the quarter, and well ahead of our understanding of 2019 net sales for the same time period under prior ownership. Base business net sales, which primarily excludes Crisco, decreased by $52.1 million or 10.5% in the third quarter of 2021 when compared to the third quarter of 2020. As a reminder, when comparing to our previous performance in our base portfolio, Q3 2020 not only included COVID-19 enhanced sales, but also the benefit of an extra week due to the timing of our 53rd week in 2020, which we estimate benefited net sales for the third quarter of 2020 by approximately $35 million. The negative comparisons to 2020 are driven by a decline of $68.5 million in unit volume, which is offset in part by $14.5 million benefit from increased net pricing, inclusive of list price increases, trade spend optimization, and a little bit of mix. Foreign exchange added $1.9 million of benefit. On a year-to-date basis, the cumulative benefit of net pricing and mix is approximately $27.3 million. Base business net sales, which primarily excludes Crisco, were up 9.2% compared to 2019, representing a two-year compound annual growth rate of 4.5% over our pre-pandemic net sales. Our base business net sales growth in the third quarter of this year represents continued sequential acceleration in growth versus 2019 relative to our performance in this year's first and second quarters. We generated adjusted EBITDA of $96.2 million in the third quarter, a decrease of $8.4 million or 8.1% when compared to the prior year period, but an increase of $10 million or 11.5% compared to 2019. The decrease in adjusted EBITDA versus Q3 2020 was largely driven by the reduction in base business volumes, coupled with increases in input costs, including materially higher costs for raw materials, factory labor and other costs, transportation and warehouse spending, and one fewer reporting week. These costs were offset in part by locking in prices through short-term supply contracts, advanced commodities purchase agreements, implementing cost savings initiatives, coupled with list price increases, trade spend optimization, and the addition of Crisco to the portfolio. Adjusted diluted per share was $0.55 in Q3 2021, compared to $0.74 per share in Q3 2020, and $0.54 per share in Q3 2019. The majority of our key brands had declines in net sales when comparing Q3 2021 to Q3 2020. However, approximately 2/3 of the decline resulted from one fewer reporting week of net sales in Q3 2021 versus Q3 2020. The majority of our brands had substantial increases in net sales when comparing Q3 2021 to Q3 2019. In some cases, for brands like Ortega and our spices and seasonings business, which were up compared to 2019, the upside was capped by limitations on production. In other cases, for brands like Back to Nature and New York Style, supply chain constraints resulted in declines in net sales when compared to prior years. Net sales of Ortega were $37.6 million in the third quarter of 2021, representing an increase of $1.6 million or 4.2% compared to the third quarter of 2020, and an increase of $2.6 million or 7.3% when compared to the third quarter of 2019. If we had unlimited manufacturing capacity, net sales growth for Ortega would have been even higher. Demand for Ortega taco sauce, taco shells, taco seasonings, and salsa remain very strong. As Casey said previously, this is a category and a brand that we will continue to invest in, and where we believe that our recently added capacity for sauce, shells, and seasonings will lead to increased performance in 2022. Net sales of Las Palmas were $9.1 million in the third quarter of 2021, representing an increase of $2.5 million or 37.1% when compared to the third quarter of 2020, and an increase of $0.6 million or 7.3% when compared to the third quarter of 2019. Last year, Las Palmas was an early harbinger of the industry-wide supply chain woes that we continue to see today. As you may recall that last year at this time, we were unable to fully meet demand for enchilada sauces. For Las Palmas, these issues have fortunately been resolved this year, which helps to account for the large increase versus Q3 2020. Spices and seasonings continues to be one of the leading drivers of our portfolio. Net sales of our spices and seasonings, including our legacy brands such as Ac'cent and Dash, and the brands that we acquired in 2016, such as Tone's and Weber, were approximately $92.9 million, a little bit less than 20% of our total company net sales for the quarter. Net sales of spices and seasonings were down by approximately $14 million or 13.1% compared to Q3 2020. The shortfall is driven primarily by capacity constraints as demand outran our supply and manufacturing capacity. While this phenomenon is getting better, and we expect will be alleviated in part by some additional capacity that we have coming on in the fourth quarter of this year or in early 2022, we are also lapping a massive quarter for spices and seasonings in last year's third quarter. When comparing Q3 2019, net sales of spices and seasonings were quite strong and increased by approximately $10.3 million or 12.5%. We are now largely through the 2021 pack season and fully caught up on supply for Green Giant. The result is an acceleration of performance beginning in the second half of the third quarter and continuing today. Green Giant generated net sales of $141.2 million in the third quarter of 2021, which, while down $17 million or 10.7% when compared to Q3 2020, is up $20.9 million or 17.4% when compared to Q3 2019. Assuming a healthy holiday season in November and December, we expect continued strength for Green Giant net sales through the fourth quarter of this year. Among our other large brands, Maple Grove Farms, which generated $20.2 million in net sales for the quarter, was down $0.5 million or 2.4% compared to Q3 2020, and up $2.7 million or 15.3% compared to Q3 2019. Similarly, Cream of Wheat, which generated $15.2 million in net sales for the quarter, was down $1.2 million or 7.4% from Q3 2020, but up $1.2 million or 8.5% compared to Q3 2019. We generated $105.7 million in gross profit for the third quarter of 2021, or 20.5% of net sales. Excluding the negative impact of a $14.1 million accrual for the estimated present value of a multi-employer pension plan withdrawal liability that we expect to incur upon the closing of our Portland manufacturing facility, and $2.8 million of acquisition divestiture-related and non-recurring expenses, including cost of goods sold during the third quarter of 2021, gross profit would have been $122.6 million, or 23.8% of net sales. Gross profit was $136 million for the third quarter of 2020 or 27.4% of net sales. Excluding the impact of $0.1 million of acquisition divestiture-related and non-recurring expenses included in cost of goods sold during the third quarter of 2020, gross profit would have been $136.1 million or 27.5% of net sales. During the third quarter of 2021, gross profit was negatively impacted by higher than expected input cost inflation, including materially increased costs for raw materials, factory expenses and transportation. We have attempted to mitigate the impact of inflation on gross profit by locking in prices through short-term supply contracts and advanced commodities purchases agreements and by implementing cost savings measures. As discussed earlier on the call, we also executed list price increases and reduced trade promotions for certain products. The short-term result is that margins have been cost-compressed relative to what we expect the business to generate in the short term. While this trend may continue into our fourth quarter and early 2022, we do expect our efforts to return the business to its historic margin profile over time. Selling general and administrative expenses were $46.4 million for the quarter or 9% of net sales. This compares to $43.4 million or 8.8% for the prior year, and $38.1 million or 9.4% in the third quarter of 2019. The dollar increase in SG&A compared to year-ago levels is almost entirely driven by a $3.5 million increase in warehousing costs, coupled with $3.3 million in incremental acquisition-related and non-recurring expenses, which primarily relate to the acquisition and integration of the Crisco brand and the sale of our Portland facility. The increase in warehousing costs was primarily driven by the Crisco acquisition and customer fines relative to COVID-19 shortages and delays. These costs were partially offset by decreases in selling expenses of $1.7 million, consumer marketing expenses of $1.2 million, and general and administrative expenses of $0.9 million, and one fewer reporting week. As I mentioned earlier, we generated $96.4 million in adjusted EBITDA before COVID-19 expenses and $96.2 million in adjusted EBITDA in the third quarter of 2021. This compares to adjusted EBITDA of $104.6 million in Q3 2020 and $86.2 million in Q3 2019. Interest expense for the quarter was $26.6 million compared to $26.4 million in the third quarter last year. The primary driver of the increase in interest expense was the acquisition of Crisco, which, as you may recall, was financed in its entirety with a combination of revolver draw and incremental term loans. The revolver currently costs us a little less than 2% in interest, and the term loan's a little less than 2.75%. Depreciation and amortization are also up year over year, driven primarily by Crisco. Depreciation expense was $15.3 million in the third quarter of 2021 compared to $10.9 million in last year's third quarter. Amortization expense was $5.4 million in the third quarter of 2021 compared to $4.7 million in last year's third quarter. We are tracking to an effective tax rate of approximately 26%-26.5% for the year, with taxes a little higher in this year's third quarter due to some discrete tax items at an effective rate of 26.8% for the quarter compared to 24.7% in last year's third quarter. We generated $0.55 in adjusted diluted earnings per share in the third quarter of 2021 compared to $0.74 per share in Q3 2020 and $0.54 per share in Q3 2019. We remain encouraged by these trends. Despite tough comparisons against 2020 and continuing supply chain challenges driven by the ongoing COVID-19 pandemic, we still expect to achieve company record net sales for the year of $2.05-$2.1 billion, representing a mid-single-digit increase in net sales compared to 2020 and a mid- to high-single-digit increase in base business net sales compared to 2019. While adjusted EBITDA margins will remain challenged this year due to higher than expected input cost inflation, including increased costs for raw materials, factory costs, transportation and warehouse costs, we also expect to generate adjusted EBITDA of $358 million-$365 million for the year. Also, similar to what we discussed last quarter, we expect the following for full year 2021. Interest expense of $105 million-$110 million, including cash interest of $100 million-$105 million. Depreciation expense of $60 million-$65 million. Amortization expense of $21 million-$22 million. An effective tax rate of approximately 26%-26.5%. I'll now turn the call back over to Casey for further remarks. Thank you, Bruce. As I said at the beginning of the call, we had a fairly strong quarter despite lapping elevated COVID-19 demand and an extra week in Q3 2020. We remain on track to deliver the mid to high single-digit growth against 2019 that we set as a target for the year. We continue to implement pricing actions to offset inflation in the portfolio. This concludes our remarks, and now we would like to begin the Q&A portion of our call. Operator? Thank you. Ladies and gentlemen, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off before your signal reaches our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. I will take the first question from the line of Andrew Lazar with Barclays. Please go ahead. Great. Thanks so much. Good afternoon. Good afternoon, Andrew. Hi. Couple of things. I guess, first off, just in thinking about full year guidance and sort of what that implies for 4Q. In 3Q, I think on a two-year basis, EBITDA was up about, I think, 13% again versus 2019. I think in the implied two-year rate of growth in 4Q is over 20%. Obviously, you think sort of EBITDA growth on a two-year basis accelerates. I'm just trying to get a sense of, I guess, the rationale behind the acceleration when, you know, generally speaking, as you've talked about and pretty much everybody else in the industry, you know, the environment's probably getting somewhat tougher rather than easier in terms of cost and, you know, supply chain and labor disruption and things like that. That'd be our first question, please. I mean, I'll lead, Andrew, and then Bruce can talk some of the numbers. I think one thing you to remember here is that we took some pretty significant pricing actions which were fielded in Q3, but really are not becoming effective until the very end of this quarter, September, late September for the Crisco, which is, you know, obviously our biggest increases in cost and pricing. Also a number of our portfolio pricing actions, which are becoming effective in the middle of October. I guess one thing I would say is that the flow of costs, you know, started coming into our P&L in Q3, but the real big flows of pricing are coming in mostly in Q4. That's a little bit of, I think, a change, maybe from the flow of how Q3 and Q4 go in the past. In terms of the supply disruptions, I would say we did have significant supply issues in Q3, and our service levels went down a little bit in Q3 from Q2. Our most recent weeks, we've started to recover some of our supply, some of our customer service rates and some of our supply issues are beginning to get better. One of the big things is obviously the new crop on Green Giant, which we've basically taken the Green Giant can business off allocation, which we've been on for months now. We're now able to ship to demand for that. you know, we're starting to see supply issues get a little bit better, but I think you correctly pointed out that we're not gonna be out of the woods on a lot of them. I expect that, you know, we'll have some gradual improvement in the fourth quarter, and then getting better in the first quarter. Andrew, just as a reminder, during last year's fourth quarter, Green Giant can was actually on allocation. We would be lapping a period where we restricted ourselves. Obviously last year, we closed on the Crisco acquisition on December 1st. We have that for one month of our results in last year's fourth quarter, but we would have it in all three months this year. Great. No, thanks for that. That's helpful. When we think about pricing, obviously a lot of the pricing you said is starting to become more effective in this quarter that we're in. I think price was up about 3%, overall in 3Q. I'm trying to get a better sense of how that price piece, the year-over-year increase in price in the P&L might look in sort of 4Q going into 2022. Trying to get a sense of how much that steps up from the 3% that we saw in this quarter. Yeah, I think you're gonna see a big step up in the fourth quarter just because of the way our pricing actions take. You know, we're effective in the trade. You know, the Yeah. You know, Crisco is probably half. Yeah. Yeah. Yeah. The significant increase on Crisco was effective to September 27. You know, that is, you know, we saw the oil costs flowing into our P&L in Q3, but because of the lead time required by customers, it became effective on September 27. Some of our other higher cost input categories also will be effective in the middle of October. You know, obviously, that pricing will carry into 2022. Yeah. For, you know, three quarters of the year. Yeah. Perfect. Just lastly, maybe just a quick comment on at least thus far. It's early, but how you're seeing sort of elasticity play out. I think you're up maybe nearly 7x levered or so, may have borrowed some additional funds quarter over quarter. I'm just trying to get a sense again of the flexibility, right, on the balance sheet to fund the dividend and such, and how you see that. Thanks so much. Yeah. Leverage is not 7x based on our covenants, a different calculation. It's actually close to 6.49x, I think. Just a couple of reminders. You know, third quarter is really the finish of the pack plan. When we think about inventory and working capital and leverage, it usually peaks in the third quarter as far as where it is for the rest of the year. We leaned in heavy this year when you think about some of the issues that we suffered last year. The demand was extraordinary for some of our Green Giant products, but we didn't have enough inventory, and we had to go on allocation. The demand continues to be incredibly strong for Green Giant, particularly on the shelf stable side. As a result, the plan this year was to lean into that pack plan, part one, to restore some of the inventory that we didn't have at the tail end of last year's pack plan. We were starting from a lower safety stock standpoint, and then lean in a little bit more so we had the capacity to satisfy the demand that we're seeing. That's our expectation, and that's part of why the trends on Green Giant are accelerating, particularly on the shelf stable side, whereas we were running on fumes at the end of last year or at the end of the second quarter. The only other thing I'd say to that, Andrew, is that, you know, obviously there's the higher costs flow into, you know, our inventories, we have an inflationary inventory adjustment going on at Q3 because that's probably the predominant step-up that we're gonna have in our working capital. It's the Green Giant pack, you know, which we took the pack and frankly, we're selling very nicely against that starting in the fourth quarter. It's the step-up in the valuation of our inventory at the higher inflationary cost. Great. Thank you both so much. Sure. Your next question will come from the line of William Reuter with Bank of America. Please go ahead. Good afternoon. Good afternoon. Good afternoon. Hi. Given the volatility with a lot of these inputs, in terms of your locking in prices for some of them next year, have you started doing that? I guess, you know, some of these, you know, may be coming down over time. I guess what has been your comfort with trying to, I guess, take risk in some of them? Really depends on the category. There's some things, you know, really where we're seeing inflation, as Casey said, in a lot of the portfolio, it's mid-single digits, but there are some areas that are extreme. You know, we think about cans, we think about some of the oils for Crisco, for example. In some of those areas, we leaned in a little bit heavier to make sure we are locking in price ahead of those price increases. Yeah. I think honestly, the way we look at it is, you know, and where we can, we want to lock in with as much, you know, forward contracting as we can. On the most volatile commodities like, say, soybean oil, you know, what we do is we will increase coverage when we see prices increasing, and we will decrease coverage when they think they've crested or they're going down. You know, right now, nobody knows really what's gonna happen on soybean oil, but I would say we're not necessarily increasing coverage on soybean oil at this current, you know, mid-60s, you know, price per pound. We were increasing coverage in the first half of this year when we saw, you know, prices increasing. We increased coverage at lower rates, which is why we had kind of the first half of the year, you know, we had, you know, better costs because we had forward bought or, you know, forward contracted for prices, you know, when it was lower. Yep. That makes sense. Does that help? Yeah. No, that does help. You know, with regard to your leverage still continuing to be a little bit elevated, and all the uncertainty in the market, is there a leverage number that you would wanna get down to before you would consider pursuing additional M&A? If there was something that was extremely opportunistic, you know, would you consider yourself in the market, you know, in the relative near future? We're very focused on getting our leverage into the 4.5x-5.5x range, and that's the goal. When it comes to evaluating M&A, we've got to evaluate opportunities in that context. The obvious answer to your question is at current leverage, and today, if we were going to look at something in the M&A world, it would either have to be a relatively modest-sized transaction, or it would have to be structured so that it wasn't increasing our leverage, both from a purchase price and valuation standpoint, and then also from a mix of how we funded it. The answer is- Very good point. In the near term, the near-term question, we would like to get, you know, leverage down below, you know, at six or below in the first and second quarter of next year. Great. Very good to hear, and I'll pass to others. Thank you. Your next question comes from the line of Michael Lavery with Piper Sandler. Please go ahead. Thank you. Good evening. Hey, Michael. Just wanted to come back to some of the price mix dynamics and touch on the mix piece, maybe a little bit related to elasticities or just which categories you're taking pricing in versus others. Any mix shifts you would expect or that you can flag in maybe what you've seen from some of the pricing so far? You know, just anything we should be watching out for as we think about modeling the next few quarters. Yeah, I think, and I know Andrew asked this, and we didn't answer it, but I think it is. It's probably important to talk about elasticity because on the last call, we said, you know, we're taking some sizable increases on some of these businesses based on input costs. You know, it's pretty early days on the significant increases I talked about becoming effective in September and October. I would say early on we are seeing lower elasticity than we originally forecast. It is early days. You know, in other words, you know, we had modeled out a little bit higher elasticities, but now that we've seen, you know, a lot of, you know, industry movement in food, and we've seen frankly, you know, private label and other, you know, branded businesses moving in many of our categories, we're just seeing a little bit lower elasticities than what we originally had expected. Okay, that's helpful. Just back on some of the fourth quarter or at least the implied fourth quarter outlook, it's historically been a quarter that tends to have some of the most surprises, and like Andrew also touched on, it's clearly got some unusual volatility at the moment. Can you just help us understand maybe what you're. I know you laid out some of the reasons you're pointing to what build the numbers, but what your sort of conservatism is or, you know, level of confidence relative to the prior years, and just how to think about what cushion there might be in your numbers. I mean, we gave the guidance numbers for this year, and obviously we felt confident enough to give those numbers. It implies a fourth quarter. To answer your question, I mean, sure, you know, we're in uncharted territory still in terms of the dynamics in the world and what's going on in COVID. We hadn't had an EBITDA guidance for this year until this quarter, and we felt it was appropriate to do so going into the fourth quarter. Yeah, I would say two things. One is, October is off to a good start in the fourth quarter. The other thing is, I think, you know, we provided guidance which, you know, says we feel there's a little upside to the consensus. Okay, great. Thanks so much. Your next question comes from the line of Karru Martinson with Jefferies. Please go ahead. Good afternoon. In terms of the co-pack pressures, I mean, what are the types of contracts that you have in terms of securing that capacity, and how are we looking for the rest of the year and into 2022? You know, our contracts will vary depending on what the specific category or product that we're co-packing. You know, honestly, we usually try and get, you know, longer term agreements, but I would say in the supply environment that we've been in the last six months, that we're not always having suppliers honoring those commitments. I mean, frequently they're basically they're trying to meet their overall surge in demand from their, you know, their customers. And we are typically trying to negotiate how much we can get of what they have available. And in some cases, they've had labor shortages themselves, which have reduced their ability. It's really a case-by-case basis, but we tend to have, you know, longer term agreements and commitments. It's just in this environment, they have come back to us and said they can't meet everything that everyone's asking for, and we've had to, you know, kind of work through that on an individual basis. I will tell you that, you know, on some of our bigger, you know, contract manufacturing, you know, our Back to Nature business, we are seeing more capacity coming our way, um, in the fourth quarter. We're starting to feel better about some of the, you know, available capacity we have from our contract manufacturers on certain key items. We are still dealing with some suppliers who have shortages, or labor problems or other things. They can't meet our full needs. On labor, where are you guys on for your facilities in terms of meeting your labor needs? Yeah, I would say we have some facilities that we are understaffed, so we're not able to get full staffing or everything that we want. It's just the hiring environment. There's just not, you know, the availability of the, you know. There's not available candidates for us to pull in. We have probably three to four facilities where, you know, we're understaffed from where we really wanna be. You know, right now we're making that up with, you know, changes in shifts and overtime and other things. You know, we're trying very hard to recruit to get to full staffing in some of our facilities like Ankeny and our licensing, like our Yadkinville plant in North Carolina, to get to full staffing and by offering incentives and some different you know schedules and other things to be able to get ourselves back up to you know full staffing. I think almost everybody in the industry is dealing with this right now. You read about the labor shortages. It's something we have to manage through. I am concerned about it, but you know we don't have facilities where I would say we're severely understaffed. We're just not at the full staffing levels we would like to be at. Thank you very much, guys. Appreciate it. Thanks, Karru. Your next question comes from the line of Carla Casella with JP Morgan. Please go ahead. Hi. I'm just curious how much of the inventory increased significantly, sequentially as well as year over year. I'm just wondering if you can give us a sense for how much of that is just the cost built into it, or if you're actually keeping extra stock in any products. It sounds like you're short everything, but any update, any details you can give there would be great. Yeah, there's really three parts to that. Just in terms of context, last year through the third quarter, we increased inventory by about $7.7 million. This year, we increased it by $177 million. That's kind of the context for the numbers and the reasons for that, you know, last year in the second quarter and really the tail end of the first quarter, we were sitting on inventory and due to the inventory we had, we were able to fulfill most of those COVID sales and not really worry about supply chain problems. We liquidated a lot of inventory in the early days of COVID and the peak of COVID. Then we had our pack plan restore some of that for Green Giant. This year, we had to build that inventory. I don't have the specific numbers broken out in terms of what was inflation versus what was loading up on new inventory. You know, certainly we've talked to the inflation that we're seeing in the full year and kind of what we expect for the back half. That should give you some context. You know, we typically load up on inventory, and we've got large purchases for the pack plan. In other areas where we think that there's inflation coming, we also bought ahead of some of those cost increases and where there were concerns around supply chain, we also bought early to make sure that we had the quantity to get us through to the end of the year. That's kind of the plan. Peak level of inventory for the year in the third quarter like it normally is, but this year even higher just because of the world that we're living in. We should see some relief, it sounds like. Just it sounds like. Just to simplify that. I'm sorry? Yeah, this is Casey. Sorry. Just to simplify that answer, I would say half more than, a little more than half of the increase is from the cost, from cost going up inflation in terms of the value of the inventory. The only unit increases really in our inventory are higher pack on Green Giant to meet the needs of the business because we didn't get a full pack last year, and we had to go on allocation. So we got, you know, pretty much 95% of what we wanted this year, which is a big change year-over-year in the units. Then the addition of the Crisco business, which we did not have at the end of the quarter three last year. So those are really only the unit changes. Everything else, you know, is really just cost step up on inflation. Does that help? Yeah, it does. It sounds like a lot of that, some of that will release over fourth quarter, but some of the Green Giant pack may be over several quarters? Yeah. If you look historically, that's typically what happens, is you do see a nice decrease in inventory going from the third quarter into the fourth quarter, as well as typically outside of years where we've done M&A, you know, fairly significant deleveraging, and then continue to sell down that Green Giant first quarter, second quarter into the you know, into the beginning of the pack. Okay. Just one other. On that Main facility sale, is that the $3.8 million of assets held for sale? Is that what we should expect in terms of the cash proceeds coming in? No, that's just relative to the value. We haven't disclosed what the sale price was, and that's probably something that will ultimately flow through our financials. You know, certainly some transparency there in that number. But at the time that we signed the agreement, we did not disclose the sale price, and we're not in a position to do so today either. Okay, great. Did you quantify how much the out of stocks or the how much that took from sales? I know I heard you say significant, but did you give any kind of quantification? We did not. Okay. Thank you. Your next question will come from the line of Eric Larson with Seaport Research Partners. Please go ahead. Yeah, thanks. Thanks for taking my question. My question, again, is on Green Giant. I guess the real question is, you now have some inventory, but your demand is still really strong, particularly shelf stable, both retail takeaway. Is there a risk that you don't have enough inventory again this year? Are you rebuilding retailer inventories? Are they still pretty low? Are you shipping ahead of consumption? Or how should we kind of look at that whole dynamic? I guess it's the retail demand that continues to surprise us. We'd hate to run out of product, but it would be a nice problem to have if we sold through all of our inventory at next year's pace. Like I said, we leaned in pretty heavy this year. We're confident that we've got the sales coming to sell through all that inventory. That was a conscious bet that we made. I mean, you know, this is in the frozen side of the business. Our retailers don't hold a lot of inventory. You know, this isn't a category that they'll really rebuild heavily. You know, there was a little bit of replenishing probably in the late September timeframe. But what we're seeing is pretty solid demand on Green Giant, and we're shipping very nicely in the first part of the fourth quarter. And as Bruce said, you know, we always expect to sell through the inventory that we get in the pack at the end of Q3. We sell through it pretty, you know, pretty consistently. We do get some additional pack in the spring, so we'll have, you know, some vegetable categories coming back in the spring that we'll do. you know, a lot of things we're gonna have to, you know, manage for the next several quarters. Okay, thanks. You know, help me out on this, and you may have talked a little bit about this. I think that demand yet for Ortega is stronger than your ability to meet that demand. Is that the only product line, or do you have several others where you're still m odestly capacity constrained. I know that you've got labor shortages and things such as that, but I think the one that stood out was Ortega. Are there others? There are. You know, and it's hard to complain when you've got sales at the levels that we have because they're, you know, especially when you compare to 2019 and some of the brands. But on a brand-by-brand basis, you know, there are some areas where we don't have enough to meet that demand, and so you get a nice lift. Ortega would be one, Las Palmas would be one. Sales are up compared to 2019. They just could be up more. There are other areas, you know, I referenced them earlier, Back to Nature, New York Style, even Static Guard, for example, where we could get more sales, but we just can't get access to the product for various reasons. On Static Guard, it's canisters. Crisco sprays. Yep. As robust as the Crisco sales were, there's a sprays business there that we're struggling to get product. Can't get canisters. Just. Yeah. You know, varies brand by brand. Overall sales are up, but on brand by brand, you can find areas where you just wish you had more product. Yes. I think there's two constraints that we're working through. One is kind of, packaging materials or, you know, or supplies, you know, like the canisters for Static Guard and Crisco sprays. In some cases, it's caps and caps liners for spices and seasonings. Then there's where we have real constraints. You know, we just took Green Giant off allocation. We talked about that. We have a full crop this year, so we're able to meet that demand. You know, we're investing in new lines on taco sauce for Ortega and on taco shells for Ortega. Those will be coming on by the first quarter. We have a new line going into our spices and seasoning facility and a chef line to be able to support additional capacity where we can't support all demand now, and that should be coming on in the next quarter. We have investments in new capacity, but we're also trying to work through material shortages to maintain full supplies. Okay, great. That's helpful. Thank you. Your next question will come from Ken Zaslow with Bank of Montreal. Please go ahead. Hey, good evening, everyone. Hey, Ken. Casey, when you talk about the businesses, and I might be reading into something, but I just kind of wanted a clarification. From the past, I don't know, five, seven years, it doesn't. It never seemed like there was a thought process of really segmenting out certain brands and investing behind them a little bit more aggressively. I get the sense that there are certain brands that you've kind of tiered out in your head at least, that you might be thinking, "Hey, you know, when we get through this and we get capacity, that we're gonna start to actually spend a little bit more aggressively on, rather than just holding the growth at whatever rate the market gives us." One, is that a fair assessment? Which brands would it be? I assume it's Ortega and Green Giant, but are there others? Is that the way to think about it? I think your framework is right. That's the work that I'm doing now, after having kind of dug into the business for the first several months. We're now looking at where do we believe that our focus. I would say not only by brand, but by category. Where are the categories and brands that we believe we have good capabilities, we can get some organic growth out of those businesses, we have good assets, and we believe that those also can be platforms for us to acquire businesses in the future where we can add value. There's a very clear definition of what those categories are. I'm not gonna talk about it today, because we're still working through all that. Then I think there are some businesses that we're gonna say, You know what? We're gonna manage these businesses for stability, and we're gonna try and kind of maintain the top and the bottom line of those businesses, but we're not gonna put a lot of resources, energy, and intensity behind those businesses. There are clear categories, and I'll say one is spices and seasonings. We've been very successful in spices and seasonings. We have a great asset. We've proven that we can work that business across retail and other channels. We've got a good portfolio of branded strength. We've gotten some procurement expertise in that area. It's a business that I think we can grow and it's nice margin. I think it's a business that we can grow successfully organically, but also look in the future to where we can bring in inorganic growth. I mean, at some point, we will come out and kind of give you guys a lot more specificity around this. But suffice to say that, you know, we're gonna decide where we wanna focus and where we're gonna not only invest, but put resources and structure ourselves to grow this part of the portfolio, and then pick the parts of the portfolio that we'd want to kind of run, you know, lean and mean and make sure that we just stabilize but not expect a lot of growth and not put a lot of resource behind. The outcome of that, to me, we're trying to get to some, you know, top line organic growth and then really find the platforms that we can acquire and grow value. I see. When you begin to segment and you think about this, do you think there's an opportunity to accelerate your top line growth more akin to other packaged food companies rather than kind of keeping it stable? The second part of that, and I'll leave it here, is when you think about your 18%-20% EBITDA margin, is 20% the plateau, or is that a milestone for somewhere else to go? Just how do you frame those thoughts? I'll leave it there, and I appreciate your time. You know, I think on the growth, I believe, you know, so we've in the past kinda signaled we're really low growth, closer to zero. Right. I personally believe that we can get 1%-2% organic growth in this total portfolio by looking at where do we wanna grow and where do we not wanna grow and being a little more choiceful about how we manage it. That we've gotten some, you know, we're starting to get some traction in some of the areas where I think we can do that. I mean, I would even like to look at the Ortega Mexican platform and say, you know, we've gotten very nice growth out of that, and I see opportunities to do that in the future with more capacity. Yes, do I think we can get a little bit stronger growth? Yes. Do I think we're gonna get up into the, where some other CPGs are? I'm not sure yet, but I think we can get better than where we have been, let's put it that way. You know, we're working on that now and working on those plans and algorithms as you know, as we speak. On the margin, you know, for me, it's you know, I think we need to get the margin at 18% and begin to move it up from there and show some margin improvement over time, which I think is very possible. The 20% is kind of a goal that I see us getting to in the next several years with you know, improving our mix or growing on the right businesses, you know, thinking about what acquisitions are really accretive to our you know, margin profile. The 20% would not be the endpoint, but I think it's a good goal for us to work towards in the next, you know, couple years. Great. I appreciate it. Thank you, guys. Your next question comes from David Palmer with Evercore ISI. Please go ahead. Thanks. Another question on Green Giant. The data, the IRI data is looking like it's down mid-teens% on a one-year basis in the last quarter. There's obviously some good reasons for that, but a lot's gonna change here in the near term with increased shipments and the pricing that you presumably will be taking there. If you're doing what your plan is, what should we be seeing in the IRI data in the coming months? What sort of improvement? Yeah, we've been looking, you know. We're seeing nice growth starting to happen on the business relative to 2019. That's kind of what, how we're looking at it. How do we build and grow, you know, from a 2019 base? Year-over-year is a little bit, you know, muddy, but I expect that we'll start showing, you know, better trends against last year as well. I think you should expect to see us growing versus that two-year-ago base in Green Giant. Mm-hmm. in the fourth quarter. Got it. I'm seeing that. Yeah. Down 3% right now. Just to be fair, I mean, Green Giant was one of the categories and brands that had the biggest benefits from COVID, you know, and so hard to lap some of those numbers until we really get to the, you know, to the period where you were on allocation. On two-year, we're seeing it down 3%, frozen in the last 12 weeks. Your thinking is you can get above, you know, back to positive two-year versus that. In the fourth quarter, we're expecting to turn positive. I think if you look at the most recent weeks, we're just about getting there. Got it. You mentioned that the inflation rate, the core inflation was mid single digits, but there was also some other areas of COGS that were up double digits. What is the overall COGS inflation? If you're breaking it out by the, you know, your COGS in terms of where you're having the inflation, does that say something about how you think about pricing strategy? Were there some pass-through categories? I'm thinking of Crisco specifically, if that's a sort of category that has a little bit more of a cost plus type pricing to it as a category. Yeah. I think two answers. Let me clarify what I said. I mean, we're actually seeing, you know, on average inflation for the full year of 2021 in our actual costs of about 7%. If you look at it's lower in the first half of the year where we were covered on a lot of commodities and our costs hadn't escalated yet. Then the second half of the year where on average, you know, our inflation and our cost is probably more in the low double digits. Low teens, excuse me. I think you have to think about the flow of how costs have come into our P&L this year. On average, it's 7%, but going forward, we're looking at, you know, inflation in the low double digits. Low teens, let's put it that way. I think that's gonna continue into next year. That, that's how we view inflation, how we look at it. Yes, it's quite different by product category. And we price based on that. We price our products and work with our retailers on pricing to recover costs that we actually see on the individual product lines. Crisco would be the place where we had the most significant increase because of the cost of canola oil is going basically 2x from where it was a year ago. We, you know, so our pricing plans, you know, take that into account. We have, you know, looking at inflation on Crisco, that's our highest category. It's also our highest category in terms of pricing to recover. Thank you. It appears there are no further questions at this time. I'll turn the conference back over to management for any additional comments or closing remarks. Thank you, operator. Thank you all for being on the call. You know, we look forward to talking to you in future discussions and calls, and thanks for your attention today. Ladies and gentlemen, this concludes today's call. Thank you for your participation, and you may now disconnect your lines.